Is there any truth to the Iraqi dinar rumors?

Have you heard the rumors about the Iraqi dinar? Week in, week out, we receive at least 2-3 questions about this. The 'word on the street' is that the Iraqi government is set to "increase" the value of the dinar, essentially re-peg it against the dollar by 2, 10, even 100 times its current value.

In other words, rumor has it that if you're sitting on $1,000 worth of Iraqi dinar, that after the re-pegging, that same dinar will be worth up to $100,000, practically overnight.

I hate to be the bearer of bad news, but it just isn't true… and I wanted to take some time today and lay these rumors to rest since it's such a popular question within this community, and I know that there are some people scrambling to pick up dinar.

In 2010, the Central Bank of Iraq did announce plans to 'redenominate' the Iraqi dinar, effectively chopping off a few zeros from the nominal value of the bank notes. But the actual value in US dollar (or euro, gold, oil, wheat, etc.) terms would remain unchanged.

Any potential upside in the Iraqi dinar is in becoming a free-floating, market based currency. Many currencies in the Middle East including the United Arab Emirates dirham and Saudi riyal are pegged to the US dollar. So is the Iraqi dinar.

Iraq's peg is set by the International Monetary Fund because, at this time, there is no international market for the dinar. In time, I suspect the dinar may break away from this fixed rate (similar to how Kuwait abandoned its dollar peg several years ago) and appreciate against the dollar.

Over time, this would result in single or double digit returns, however, not overnight fortunes of making 100 times your money. I still own some of the old Saddam Hussein dinars, they're just collectors items for me, nothing more.

Bottom line: don't believe the hype about the dinar. Even if you're bullish on the country and think that a market valued dinar will appreciate, you would still have to hold the investment in cold, hard cash. There are better proxies for Iraqi growth, particularly in Kurdistan. We'll explore those another time.

Another reader, Victor, recently wrote and asked, "Simon, how do you receive mail? You are traveling constantly, what is the 'secret' that permanent travelers use to receive mail and packages?"

Physical mail is so last century. I can't remember the last time I received something in the mail that I actually cared to read. In the US, it's either junk mail, universities and charities hitting me up for more money, or annoying letters from some government agency.

Years ago, I used to have a commercial mail drop in the US. These companies make it their business to receive mail on your behalf, then forward it to you wherever you are in the world.

The guy who owned it was a salt of the earth sort of fellow… Vietnam Vet, 'death from above' tattoos all up and down his forearms, and a hell of a nice guy. I used to call him up every few weeks to have him FedEx my mail to me, and we'd end up BSing for an hour about the latest stupid thing that came out of Bush's mouth.

Unfortunately, he went bust. Poof, no more maildrop. It turns out he wasn't a very good businessman. So I have literally been without a real postal mailbox for about 4-years.

If I want to receive a package, I just have it shipped to wherever I am (or expect to be) in the world. If international shipping isn't possible, I ship to a friend's address in the US and ask them to send it on to me.

Any federal agency that needs to find me has appropriate contact information for one of my tax attorneys in Florida, and this is about the only real mail that I receive anymore- notices from the State Department, IRS, or Homeland Security come in through his office, and he forwards them to me.

Removing yourself from the postal system, or at least separating your mailing address from your home address, is a great step to increase your privacy. As privacy master JJ Luna often says, you never want to associate your name (i.e. mail) with your home address.

Commercial maildrop services are a good solution for this- you could simply set up a mail service near your home and collect all mail there. Or, if you're an expat, you could set up a maildrop in your home country and have them receive and forward your mail to you anywhere in the world.

In this case, it would make sense to pick a mail drop in a state or province without any state sales tax… that way, if you buy something online, there will be no sales tax charged. This alone can often save the cost of the mail drop.

In the US, you can try these places in Oregon or Delaware, which have no state sales tax-

http://www.themailcenter.com/,

http://www.mailforwardingservices.com/

http://www.homebaseoregon.com/

http://www.demailbox.com/

In Canada, you would want to have something in Alberta: http://www.calgarymailbox.ca

If you're looking to move overseas, sometimes it makes sense to set up a maildrop in your new country in order to ensure that you receive mail reliably. In Panama, for example, you could try http://www.centam-mbe.com/ or

http://mailboxespanama.com/

Lastly, there are services like SwissPost in Switzerland or EarthClassMail in the United States which will receive all of your mail for you, and scan/email everything to you.

This is a reasonable solution if you expect to travel a lot and still receive a lot of mail, though I personally have privacy concerns of someone I don't know going through my mail.